FTX Sam Bankman-Fried
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FTX Founder Sam Bankman-Fried Apology Letter to FTX Employees

24th November 2022 | Hong Kong

FTX Founder Sam Bankman-Fried had sent an apology letter to FTX employees.  Earlier in November 2022, FTX, the 5th largest crypto exchange (FTX)with $626 billion trading volume in 2022, had filed for bankruptcy (10/11/22).  FTX Founder Sam Bankman-Fried: “Nothing that happened was your fault. We had to make very hard calls very quickly. I have been in that position before, and should have known that when shitty things happen to us, we all tend to make irrational decisions. An extreme amount of coordinated pressure came, out of desperation, to file for bankruptcy for all of FTX—even entities that were solvent—and despite other jurisdictions’ claims.”  FTX Founder & Chairman Sam Bankman-Fried who had resigned at the bankruptcy, had tried to engineer a $8 billion to $9.4 billion bailout from investors including from Elon Musk and biggest competitor & top crypto exchange Binance & Founder Changpeng Zhao but failed.  In FTX bankruptcy petition, FTX Trading has $10 billion to $50 billion in assets, $10 billion to $50 billion in liabilities, and more than 100,000 creditors. John J. Ray III, a restructuring expert, has been appointed to take over as CEO.  See Sam Bankman-Fried Apology Letter to FTX Employees below.

” An extreme amount of coordinated pressure came, out of desperation, to file for bankruptcy for all of FTX—even entities that were solvent—and despite other jurisdictions’ claims “

 


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FTX Founder Sam Bankman-Fried Apology Letter to FTX Employees

FTX Sam Bankman-Fried

FTX Founder Sam Bankman-Fried Apology Letter to FTX Employees

Sam Bankman-Fried:

“Hi all—

I feel deeply sorry about what happened. I regret what happened to all of you. And I regret what happened to customers. You gave everything you could for FTX, and stood by the company—and me.

I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again. You were my family. I’ve lost that, and our old home is an empty warehouse of monitors. 

When I turn around, there’s no one left to talk to. I disappointed all of you, and when things broke down I failed to communicate. I froze up in the face of pressure and leaks and the Binance LOI and said nothing. I lost track of the most important things in the commotion of company growth. I care deeply about you all, and you were my family, and I’m sorry.

I was CEO, and so it was my duty to make sure that, ultimately, the right things happened at FTX. I wish that I had been more careful.

I want to give you a better description of what happened—one I should have written out as best I understood it much earlier.

Piecing things together recently, making approximations—I don’t have full data access right now to get precise answers—and marking everything to market, regardless of liquidity, I believe that the events that led to the breakdown this month included:

1) A crash in markets this spring that led to a roughly 50% reduction in the value of collateral;

a. ~$60b collateral, ~$2b liabilities -> ~$30b collateral, ~$2b liabilities

2) Most of the credit in the industry drying up at once;

a. ~$25b collateral, ~$8b liabilities

3) A concentrated, hyper-correlated crash in November that led to another roughly 50% reduction in the value of collateral over a very short period of time, during which there was very little market bid-side liquidity;

a. ~$17b collateral, ~8b liabilities

4) A run on the bank triggered by the same attacks in November;

a. ~$9b collateral

5) As we frantically put everything together, it became clear that the position was larger than its display on admin/users, because of old fiat deposits before FTX had bank accounts:

a. ~$9b collateral, ~$8b liabilities

I never intended this to happen. I did not realize the full extent of the margin position, nor did I realize the magnitude of the risk posed by a hyper-correlated crash. The loans and secondary sales were generally used to reinvest in the business—including buying out Binance—and not for large amounts of personal consumption.

I deeply regret my oversight failure. In retrospect, I wish that we had done many many things differently. 

To name a few:

a) being substantially more skeptical of large margin positions

b) examining stress test scenarios involving hyper-correlated crashes and simultaneous runs on the bank

c) being more careful about the fiat processes on FTX

d) having a continuous monitor of total deliverable assets, total customer positions, and other core risk metrics

e) Putting in more controls around margin management.

And none of this changes the fact that this all sucks for you guys, and it’s not your fault, and I’m really sorry about that. I’m going to do what I can to make it up to you guys—and to the customers—even if that takes the rest of my life. But I’m worried that even then I won’t be able to.

I also want to acknowledge those of you who gave me what I now believe to be the right advice about pathways forward for FTX following the crash. You were right, of course: I believe that a month earlier FTX had been a thriving, profitable, innovative business. Which means that FTX still had value, and that value could have gone towards helping to make everyone more whole. We likely could have raised significant funding; potential interest in billions of dollars of funding came in roughly eight minutes after I signed the Chapter 11 docs. Between those funds, the billions of dollars of collateral the company still held, and the interest we’d received from other parties, I think that we probably could have returned large value to customers and saved the business.

There would have had to be changes, of course: way more transparency, and way more controls in place, including oversight of myself. But FTX was something really special, and you all helped make it that. Nothing that happened was your fault. We had to make very hard calls very quickly. I have been in that position before, and should have known that when shitty things happen to us, we all tend to make irrational decisions. An extreme amount of coordinated pressure came, out of desperation, to file for bankruptcy for all of FTX—even entities that were solvent—and despite other jurisdictions’ claims. I understand that pressure and empathize with it; a lot of people had been thrust into challenging circumstances that generally were not their fault. I reluctantly gave in to that pressure, even though I should have known better; I wish I had listened to those of you who saw and still see value in the platform, which was and is my belief as well.

Maybe there still is a chance to save the company. I believe that there are billions of dollars of genuine interest from new investors that could go to making customers whole. But I can’t promise you that anything will happen, because it’s not my choice. In the meantime, I’m excited to see some positive steps being taken, like LedgerX being turned back on.

I’m incredibly thankful for all that you guys have done for FTX over the years, and I’ll never forget that.

—SBF”

 

$32 Billion 5th Largest Crypto Exchange FTX Files for Bankruptcy & $500 Million Hacked After Bankruptcy, Investors Include SoftBank, Tiger Global, Sequoia Capital, Singapore Temasek, Ontario Teachers’ Pension Plan, Gisele Bündchen & Naomi Osaka

12th November 2022 – The 5th largest crypto exchange (FTX) with $626 billion trading volume in 2022, had filed for bankruptcy (10/11/22) and newly appointed CEO John Ray III released in a Twitter statement that FTX had been hacked (reports estimate $400 million to $600 million hacked) after bankruptcy.  FTX depositors expected to lose billions in crypto deposits with the bankruptcy, and at the same time triggering law-enforcement investigations and potential criminal charges.  With FTX digital currency (FTT) collapsing and with Binance & Founder Changpeng Zhao learning of Sam Bankman-Fried trading firm (Alameda Research) assets is mainly made up of FTT, Binance started liquidating FTT, that quickly triggered a global selloff.  FTX Founder & Chairman Sam Bankman-Fried who had resigned at the bankruptcy, had tried to engineer a $8 billion to $9.4 billion bailout from investors including from Elon Musk and biggest competitor & top crypto exchange Binance & Founder Changpeng Zhao but failed.  Binance: “As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com … … In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help. Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.”  US Treasury Secretary Janet Yellen: “It shows the weakness of this entire sector … … The notion that you could use the deposits of customers of an exchange and lend them to a separate enterprise that you control to do leveraged, risky investments – that wouldn’t be something that’s allowed.”  FTX is a crypto exchange and pays depositors high interest rate to attract deposits.  The top 5 largest crypto exchange before FTX banktrupcy are Binance, OKX, UpBit, Coinbase & FTX.  See below for more info including Elon Musk, and investors in FTX.

 

Follow FTX announcement on Twitter https://mobile.twitter.com/ftx_official/with_replies

(FTX websites may have been hacked)

In FTX bankruptcy petition, FTX Trading has $10 billion to $50 billion in assets, $10 billion to $50 billion in liabilities, and more than 100,000 creditors. John J. Ray III, a restructuring expert, has been appointed to take over as CEO.

FTX Sam Bankman-Fried offers Elon Musk $3 billion to invest in Twitter

  • Michael Grimes Morgan Stanley (Represents Sam): Offering “at least $3 billion” to buy Twitter, and talk about the potential for “social media blockchain integration” (blockchain version of Twitter).
  • Elon Musk: Does Sam actually have $3B liquid?
  • Michael Grimes Morgan Stanley: “He’s into you… I do believe you will like him. Ultra genius and doer builder like your formula. Built FTX from scratch after MIT physics.”
  • Elon Musk: Blockchain twitter isn’t possible.  Will meet with Sam so long as I don’t have to have a laborious blockchain debate.

After FTX Bankruptcy: 

  • Accurate. He set off my bs detector, which is why I did not think he had $3B.
  • — Elon Musk (@elonmusk) November 12, 2022

 

FTX Investors – SoftBank, Tiger Global, Sequoia Capital, Temasek, Ontario Teachers’ Pension Plan, Gisele Bündchen & Naomi Osaka

SoftBank Vision Fund

FTX Investors – In the latest funding round, FTX has a $32 billion valuation and have leading investors & celebrities including SoftBank, Tiger Global, Sequoia Capital, Temasek, Ontario Teachers’ Pension Plan, Gisele Bündchen & Naomi Osaka.

 

FTX Founder & Chairman Sam Bankman-Fried, Age 30 with $16 Billion Fortune Prior to FTX Bankruptcy 

FTX Sam Bankman-Fried

FTX Founder & Chairman Sam Bankman-Fried (Age 30) founded the firm in 2019, and had a personal fortune of around $16 billion to $17 billion prior to the bankruptcy.  Alameda Research was founded in 2017 as a quantitative trading firm and will also be winded down.  Sam Bankman-Fried graduated from MIT (Massachusetts Institute of Technology) and his parents are professors at Stanford University. 

 

2022 Top 5 Largest Crypto Exchange

CZ (Changpeng Zhao) Binance CEO and Founder

The top 5 largest crypto exchange before FTX banktrupcy are Binance, OKX, UpBit, Coinbase & FTX.

2022 Volume YTD (9/11/22)

  • Binance – $4.9 trillion
  • OKX – $960 billion
  • UpBit – $800 billion
  • Coinbase – $775 billion
  • FTX – $626 billion
  • Source: CoinGecko

 

Sam Bankman-Fried Sees His $16 Billion Fortune Shrink

 

Breaking Down The FTX Collapse

 




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